Ashes to Ashes (6 page)

From 1880 to 1910, the United States underwent an extraordinary transformation. Its population nearly doubled, due in large part to the influx of the poor
and degraded masses from abroad who flocked to the cities, where work was more abundant and life proceeded at a quickened pace. In this faster-moving world of electric lighting, transportation, and communication, as the midday dinner gave way to the quick lunch away from home and the horse moved over for the automobile, old ways of smoking lost favor. Chewing tobacco was no longer merely messy but socially disagreeable in more crowded urban America, and its inevitable by-product, spitting, was now identified as a spreader of tuberculosis and other contagions and thus an official health menace. The leisurely pipe all at once seemed a remnant of a slower-tempo age, and cigar fumes were newly offensive amid thronged city life. The cigarette, by contrast, could be quickly consumed and easily snuffed out on the job as well as to and from work.

This watershed period marked the beginning of the consumer age of trade-marked, mass-produced, and nationally distributed products. From about 1880, Americans of all social classes began to eat, drink, chew, smoke, dress, and clean themselves and outfit their homes with factory-made goods available at moderate prices because they were identically produced in a continuous process that used plentiful low-wage labor. Flowing from this mechanized cornucopia were soups, soaps, cereals, toothpaste, safety razors, cameras, canned comestibles of all sorts, chewing gum, and the cigarette. To spur a demand for these new products based on something other than the lowest possible price, merchandisers created attractive packaging and alluring advertisements. The settling of a continental nation was bringing an unprecedented prosperity to the common man, and with it dollars for goods beyond necessities. The cigarette, though, had proven highly resistant to mass production for this beckoning marketplace.

As of 1876, the cost-per-thousand for the standard factory hand-rolled cigarette was ninety-six cents, of which all but ten cents went to pay the rollers. Allen & Ginter was employing hundreds of girls as rollers; no matter how comely and moral, they presented a chronic supervisory problem and a highly variable quality of labor. The softness of the materials that went into a cigarette greatly complicated the development of a machine efficient enough to replace human hands. The filler was often too loosely packed and the final product too irregularly shaped; the continuous roll of the paper wrap also was subject to tearing at the slightest irregularity in the applied tension. And with stray tobacco bits flying about and so many moving parts for them to lodge in, the contraption broke down regularly.

To overcome these obstacles, Allen & Ginter offered the then enormous prize money of $75,000. A teenage tinkerer named James Albert Bonsack, son of a plantation owner near Lynchburg, had been working on the problem for years, and in 1880, when he was twenty-one, finally obtained a patent. The Bonsack machine had an improved feeding mechanism, forming tube, and cutting
knives that allowed it, at peak efficiency, to turn out between 200 and 212 cigarettes a minute, the equivalent of what forty to fifty workers could produce among them. The one-ton behemoth rarely reached its top-rated output, usually managing 70,000 units each ten-hour day.

Still, Bonsack’s machine promised major savings in the cost of production, and Allen & Ginter ordered a model installed on its premises on an experimental basis. Contemporary reports suggest that there was more involved than its operating efficiency in the company’s final rejection of the Bonsack machine. There was the prize money, of course, but along with other tobacco companies that had considered the Bonsack, Ginter’s firm feared high buyer resistance to a machine-made version of a product that had traditionally been thought of as handcrafted; perhaps the taste of the machinery would be perceived as somehow clinging to the tobacco. Then, too, there was the fear that the machine would prove too efficient, leaving the company with mountains of cigarettes that exceeded the demand. And finally, perhaps Allen & Ginter reflected the managerial timidity and fear of technological advances, with their accompanying risks and dislocations
(e.g.
, the dismissal of unneeded workers), which afflicted Richmond industrialists of this period and doomed the once prosperous city to becoming an economic backwater.

What is certain is that Allen & Ginter, with the leadership of the infant cigarette business in hand and dominance over its promising future within grasp, let the Bonsack machine go. A young, ruddy giant from North Carolina, lacking Ginter’s refinement but full of resolve, was waiting to snatch it away and, in so doing, create one of America’s great fortunes. The not incidental cost to the nation’s physical well-being would prove incalculable.

V

AWIRY
, taciturn widower of forty-five, Confederate gunnery officer Washington Duke had watched Richmond burn under pounding by Union cannon before being taken prisoner in the closing weeks of the war. Freed after Appomattox, Duke made his homeward trek of 135 miles on foot, through the scarred countryside he had gone off to defend, though he was a foe of slavery and had voted for Abraham Lincoln in 1860. On reaching his 300-acre farm near Durham, he found that Sherman’s marauding troops had stripped the place of crops, tools, and livestock. All that was left to him were a pair of blind mules, a small batch of cured tobacco leaf, and his three children, a daughter and two sons, who had stayed with his late wife’s folks while Wash was off fighting.

His older son was just nine, the namesake of the man elected fifteenth President of the United States the year the boy was born, but even then it was plain
that James Buchanan Duke, whom everyone called Buck, was a lad of uncommon size, strength, and wits. He helped haul out the leftover leaf that his father managed to find machinery to grind and press, and the two of them set out behind those bedraggled mules to peddle their home-grown chew. Some took Wash Duke’s long silences for wisdom, others disagreed, but all concurred that he could do the work of two men, and with his boy Buck, who joined him in the dawn-to-dusk labor, the family eked out a subsistence living from their Bright leaf.

With the success of John Green’s Bull Durham operation almost right before his eyes, Wash Duke gauged that he could make a better living by processing and selling tobacco than by growing it. He opened a little factory on Durham’s Main Street and made Buck his right-hand man. Early in his teens, the boy had turned into a tall, broad-shouldered hulk, hard to miss with his red hair and pale blue eyes under a floppy straw hat, his pigeon-toed walk that approached deformity, and a bulge of tobacco perpetually in his cheek. A pugnacious streak drove him on occasion to lord it over his older sister and frail younger brother, but otherwise, Buck Duke was an astonishingly disciplined youth, dutiful, hardheaded, and resourceful—a study in applied energy. When not directing the hired help, he was repairing the machinery, labeling the burlap sacks with the Dukes’ brand name—Pro Bono Publico—or off on a far-flung wagon route to deliver goods to storekeepers and gather new orders. Sent with his siblings to a Quaker academy for some formal learning, the big boy found the Latin, poetry, and much else in the curriculum lacking in any vocational relevance and after a couple of months came squawking home. A stay at a business school in Poughkeepsie, New York, better suited to his aptitudes, allowed Buck to master double-entry bookkeeping and other practical skills. Back home again, he applied his fresh tools to the Duke factory books and by sundown each day knew to the penny how their operations were faring. Wash Duke knew an unpolished gem when he saw one and made Buck, just eighteen, his full partner in the business.

The three-story, false-front Duke establishment with its little bell tower had become a Durham fixture by now, and under Buck it grew into a well-run, steadily expanding business, but always well within the shadow of the mighty Durham Bull, which was spreading the town name across America and overseas. The Duke of Durham brand pipe tobacco, successor to Pro Bono Publico, prospered in no small measure due to the Bull’s reflected glory; little love was lost between the two establishments.

Buck could see, though, that he and his father were in a fight that in time they would have to lose. Then he hit upon the one area in the Bull Durham product line that the far bigger company was neglecting, and surely not by oversight—the ready-made cigarette. Capitalizing on the growing fame of its name, the Bull sold the makings for cigarettes that buyers rolled themselves,
and saw no reason to forgo its profit by absorbing the painfully high cost of labor to sell them pre-rolled. But Buck also knew of the progress Allen & Ginter was making with cigarettes in Richmond, and that several New York firms were beginning to move the low-priced product in volume. Here was a new kind of smoke for a new age, and, in view of their location in the heart of the Bright belt, with its potential advantage of a cheap supply of tobacco ideally suited for cigarettes, why shouldn’t the Dukes plunge vigorously into the fray? Wash was persuaded by Buck’s conviction, and in 1881 Duke of Durham cigarettes debuted.

Buck threw all the company’s limited resources into the effort. Customers were presented with a package that not only matched Allen & Ginter’s inclusion of lithographed picture cards but notably improved on the Richmond firm’s offerings by selling the Duke line in sturdy, brightly colored little cardboard boxes. This “slide-and-shell” package, which worked like a miniature bureau drawer, was more costly than their competitors’ soft paper packs, but the added protection it lent the cigarettes at once distinguished the Duke brand. In Buck’s mind, though, the real battleground was not the package or the premiums inside but the price.

Cigarettes were essentially a two-tiered market. At the top were the luxury imports, like the Egyptian brand, made of all Oriental leaf, which sold at fifty cents for twenty smokes, and the still tonier Huppmann Imperiales of Havana manufacture, which fetched six cents apiece. At the bottom were the cheap all-domestic brands like the Dukes’, which sold for a dime for a pack of ten or, at the least, a nickel for a pack of eight of a somewhat trashy blend. The federal cigarette tax on manufacturers of $1.75 per thousand made it difficult to bring down the price and sustain any profit. But in 1883, the tax, instituted as a revenue measure midway into the Civil War, was slashed to fifty cents per thousand, and Buck Duke was prepared to pass the savings on to the customer. That same year, he caught wind of the woes Allen & Ginter was experiencing with the Bonsack machine, which had been rejected by all other leading manufacturers as well. Buck hurried to Lynchburg to have a look at the mechanical contraption, and he liked what he saw well enough to have two of the Bon-sacks brought to the Duke factory floor for a trial installation—at a properly reduced cost.

Still smarting from their dashed hopes, Bonsack and his backers were determined enough now to offer the services of their very best mechanics, who worked for months with Duke and his hired hands to get the bugs out of the machines. Finally, on the last day of April 1884, the machine operated perfectly for a full ten-hour shift, manufacturing some 120,000 cigarettes. Duke now demanded his reward—a special deal for the Bonsacks: Duke would always enjoy a royalty charge at least 25 percent under what any future competitors using Bonsacks would pay. In return, he agreed to take as many of the
Bonsacks as his company could keep busy. Toward that end, Buck calculated that he could cut his retail price in half, charging a nickel for a pack of ten Duke of Durham cigarettes. Against his price of four dollars per thousand to the jobbers, Buck had to pay 87.5 cents for tobacco (372 pounds @ 25 cents), 17.5 cents for packaging and shipping, 50 cents in taxes, and 30 cents for manufacturing (including a 24-cent royalty to Bonsack), for a total of $1.85. Even at the standard discount of 10 percent for prompt payment by jobbers, Duke could achieve nearly a 100 percent profit.

The whole strategy made sense only if the company could generate far more sales. And in the new age of branded packaged goods, price advantage alone would not be adequate incentive to assure sales, especially for goods in a nonessential category. The manufacturer had to catch customers’ eyes, arouse their curiosity, and suggest a need or use where none was apparent.

Duke began by adding new entries with snappy names to his brand stable and putting them in bright packages with distinctive lettering and easily recognized images. The front of Duke’s Cameo brand pack, for example, was devoted almost entirely to the name and likeness of a large cameo ring depicting an elegant, dark-curled beauty in a buoyant floral chapeau. Some Duke brands now offered buyers coupons redeemable for pleasing collectibles like miniature college pennants and Oriental rugs. To dealers Duke offered free clocks and folding chairs among other practical inducements to push his brands. And he started advertising on a scale and in places new to the trade.

Even with thousands of potential outlets for-his attractive new goods, Duke knew he ought not to rely on jobbers alone to stimulate sales; in many cases they handled competing brands as well and could not be expected to pitch Duke brands to the detriment of the rest. To carry his case directly to the retail trade and promote it vigorously to the public, he engaged the services of Edward F. Small, a smooth-talking young Southerner with a decided knack for razzle-dazzle. Small started in his hometown of Atlanta, where Allen & Ginter’s brands held sway, by obtaining—for a price—the endorsement of a sensuous French actress called Madame Rhea and posing her for an advertisement at a lectern piled high with packs of Duke’s brands. Then Small flooded the city with samples, all including picture cards of leading ladies of the stage from a set that had been newly lithographed for the Duke line. Although local newspapermen were skeptical about Madame Rhea’s use of the product, as well as her talents and virtue, dealers loaded up and the stock moved; pulchritude sold cigarettes.